TORONTO, Sept. 13, 2012 /CNW/ - KEYreit (TSX: KRE.UN) ("KEYreit" or the
"REIT") commented today that it has been advised that Priszm Income
Fund and related entities ("Priszm") received an order by the court
approving the sale of 65 restaurants located in Quebec to Olympus Food
(Canada) Inc. ("Olympus"), a Canadian subsidiary of a pre-existing KFC
franchisee in the Philippines, and a related party to Hi-Flyer Food
(Canada) Inc., the entity that purchased the Priszm restaurants in
Alberta and Manitoba in May of this year.

Of the restaurant locations being sold, KEYreit is the landlord of 49
locations. The REIT owns two properties that are not part of the sale
transaction and these leases have been disclaimed by Priszm with an
effective date of September 21, 2012. KEYreit has provided Olympus with
the necessary consents to assign the leases for the 49 locations and
expects the Olympus purchase to close effective September 17, 2012.
With the completion of this sale, Priszm will no longer be a tenant of
the REIT.

"The Priszm matter has now reached its conclusion. We are very pleased
to put this issue behind us", said Teresa Neto, Chief Financial Officer
of the REIT. "In March 2011, we started with 188 locations leased to
Priszm. Today we have nearly 20 different tenants leasing these same
properties, including well-known national tenants such as A&W, Pizza
Pizza, Starbucks, McDonalds & Subway; and even greater tenant
diversification is expected as the REIT completes its final re-leasing
plans. This final Priszm sale allows KEYreit to move on from this
chapter in its history and to fully focus on growing the REIT with a
strong, diversified and stable tenant base across Canada."

KEYreit continues to pursue its claim in respect of certain of the sales
proceeds relating to Priszm's sales of its restaurants.

Including the two disclaimed Quebec leases noted above, a total of 47
leases were disclaimed out of the original 188 Priszm leases. As of
today's date, KEYreit has leased 34 of the disclaimed sites, or 73% of
the total disclaimed gross leasable area.

"The re-leasing of the remaining 13 vacant sites continues to be one of
KEYreit's immediate priorities," said Kevin Salsberg, Chief Operating
Officer of KEYreit. "We expect the majority of these sites to either be
re-leased or sold over the next 12 months."

Forward-Looking Statements

This MD&A contains certain information or statements that may constitute
forward-looking information within the meaning of securities laws,
which reflect the current view of KEYreit with respect to the REIT's
objectives, plans, goals, strategies, future growth, results of
financial performance, financial and operating performance and business
prospectus and opportunities . In some cases, forward-looking
information can be identified by the use of terms such as "may",
"will", "should", "expect", "plan", "anticipate", "believe", "intend",
"estimate", "predict", "potential", "continue" or other similar
expressions concerning matters that are not historical facts. In
particular, forward-looking information included in this MD&A includes,
but is not limited to, statements with respect to the REIT's ability to
lease vacant property units, collect minimum rents, diversify its
tenant base, undertake land intensification projects, refinance loans
and mortgages at their maturity, complete accretive acquisitions, and
maintain or grow monthly cash distribution levels, and also with
respect to the timing of such events. Forward-looking information
should not be read as guarantees of future events, performance or
results, and will not necessarily be accurate indications of whether,
or the times at which, such events, performance or results will be
achieved. All of the statements and information in this MD&A containing
forward-looking information are qualified by these cautionary
statements.

Forward-looking statements are based on information available at the
time they are made, underlying estimates and assumptions made by
management and management's good faith belief with respect to future
events, performance and results, and are subject to inherent risks and
uncertainties surrounding future expectations generally which could
cause actual results to differ materially from what is currently
expected. Such risks and uncertainties include, but are not limited to
the REIT's reliance on key tenants, risks associated with investment in
real property, competition, reliance on key personnel, financing and
refinancing risks, distributions, environmental matters, tenant risks,
risks related to current economic conditions and other risk factors
more particularly described in the REIT's most recent Annual
Information Form available on SEDAR at www.sedar.com. Additional risks
and uncertainties not presently known to the REIT or that the REIT
currently believes to be less significant may also adversely affect the
REIT.

KEYreit cautions readers that the list of factors is not exhaustive and
that should certain risks or uncertainties materialize, or should
underlying estimates or assumptions prove incorrect, actual events,
performance and results may vary significantly from those expected.
There can be no assurance that the actual results, performance, events
or activities anticipated by the REIT will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effect on, the REIT. The reader should not place undue
importance on forward-looking information and should not rely upon this
information as of any other date. The REIT disclaims any intention or
obligation to update or revise any forward-looking information, whether
as a result of new information, future events or otherwise, except as
required under applicable securities laws.